The Israel Post Company’s second-quarter financial statements show an increase in revenue but a significant drop in net profit. These will likely be the last financial statements published by the Israel Post Company, which still operates under the Government Enterprise Authority, following the completion of the privatization and sale process to the Mirgam Phoenix Reiman Schlussel consortium, which acquired the company in May.
The war was a factor that hurt Israel Post’s second-quarter results. Fewer Israelis were traveling abroad, and fewer people were exchanging currency at Israel Post branches, which is usually a profitable business for the company. A drop in the number of flights to Israel also hurt the profitability of its parcel service.
The Israel Post Company was privatized in May and sold to a consortium led by Weil family-owned Mirgam for NIS 461 million excluding debt, along with insurance company The Phoenix and confectionery importer Lyman Schlussel. The company’s second-quarter revenue rose 3.5 percent to NIS 427 million. Revenues from its financial services division, which include interest income, rose 6 percent to NIS 150 million. Revenues from postal and trade services increased by just over 2.5 percent compared to the same period last year.
Operating profit fell 57% as other income and expenses, net, plunged 47% year-on-year to NIS 74 million, due to the recording of a one-time provision for severance pay in the second quarter of the year.
Net profit fell 68% to 48 million shekels, a figure that can be read in two ways. On the one hand, it represents declining profitability. On the other hand, before an aggressive recovery program that cost the state billions of shekels, Israel Post was losing a million shekels a day. The very fact that the company is profitable is ultimately a positive sign from the state’s perspective, which will no longer need to inject public funds into a bailout.
After the end of the reporting period, the Israel Post Company will have paid a NIS 300 million debt to China Post, with a further NIS 40 million due shortly, which will bring the debt to a final payment of NIS 100 million in 2023.
Mishael Vaknin, chairman of the Israel Post Company, said: “This result is the culmination of the efforts of thousands of dedicated employees who turned around a company that was on the brink of bankruptcy just two years ago. Israel Post’s revolution shows that things can be done differently and how important it is to keep politics out of a company that belongs to the public and whose mission is to serve the public.”
Published by Globes (en.globes.co.il), an Israeli business news site, on August 29, 2024.
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